My take: A double dip
The pandemic broke an entrepreneurial streak. In most European countries, business formation rates had been slowly but surely rising through 2019. That number plummeted with the first set of lockdowns and restrictions.
But 2020 was a blip. After the initial impact of the pandemic, budding entrepreneurs in several places started up their own firms in record numbers. Counterintuitively, new companies in public-facing sectors surged.
What also surged in 2021 was the number of corporate bankruptcies (compared to 2020). Technology and services firms were hardest hit by the slowdown and end of public support schemes. That said, 2021 numbers were still generally lower than the immediate pre-covid period.
The business aid switch-off and supply chain challenges could cause more Luxembourg company closures in 2022, said Herbert Eberhard at the data and debt collection agency Creditreform. “Due to the strong service sector, however, the increases are likely to be lower than in neighbouring countries.”
This article first appeared in the May 2022 edition of Delano magazine.